Commercialization: Licensing at The University of British Columbia

Brad Wheeler, Technology Transfer Manager, University-Industry Liaison Office

For the Sauder School of Business

January 29, 2014

Overview

• UILO – Quick Outline• UBC Policies – Research, IP• Patenting• Licensing!

The University of British Columbia (est. 1908)

UBC Vancouver Campus

• 5 Affiliated Teaching Hospitals

• 12 Faculties; 2,383 FT Faculty

• 38,447 undergraduate students

• 9,997 graduate students

• 402 hectare campus

The University of British Columbia

UBC Okanagan Campus

• 7 Faculties; 368 FT Faculty

• 7,938 undergraduate students

• 689 graduate students

Why Contact the UILO

• Sponsored research

• Discoveries with commercial/knowledge mobilization potential

• Entrepreneurship opportunities

• IP Transfer to/from UBC• UBC Neglected Disease Initiative• UBC Global Access Principles• entrepreneurship@UBC

• UILO Voucher Program• UBC Seed Accelerator Fund

• Industry Engagement• Knowledge Mobilization• UBC Living Lab

UILO Objectives

• Support the academic mission of the University

• Enhance the translation of research into increased benefits to society and an improved quality of life

• Promote economic diversification and job creation in British Columbia

• Support the entrepreneurial activities of the UBC community

UBC is a Commercialization Powerhouse

• >$500m in external research funding annually

• Ranked #8 in North America and #1 in Canada for its commercialization activities

• 158 spin-off companies created as at March 31, 2013

• UBC technologies have generated more than $5 billion in sales for Canadian companies

2012/13 Activities

• $519 million external research budget

• $53 million industry sponsored research

• 152 technology disclosures

• 245 patents filed

• 373 active licenses

• 5 new spin-off companies (158 total)

• $5.4 million in royalties & liquidated equity ($150.0M total)

Licensee Location (Active Licenses and Assignment)

12

3

14

196(132 in BC)

142

6

10

UILO Sponsored Research Group

• Drafts and administers industry-sponsored research agreements for UBC – 1,210 in 2012/13 ($53.6m)

• Administers some government and non-profit agreements and contracts – 951 in 2011/13 ($83.3m)

• Performs many of these functions for UBC’s Affiliated Hospitals

Industry Sponsored Funding 2011/12(% of $43.1m)

Applied Science; 13%

Science, 16%

Medicine, 62%

Other; 9%Agreement; 6%

Clinical Research Agreement; 26%

Contract; 37%

Grant; 31%

By Faculty By AgreementType

UILO Technology Transfer Services

• Assess new inventions

• Develop plan to get invention commercialized (required research, funding, licensing)

• Support prototype development

• Protect & manage IP

• Market & license or mobilize technologies

• Create spin-off companies

So You Have a New Invention?

• Pre-screening – quick, loose assessment to identify fatal problems

• Full assessment• Full prior art search and patentability assessment• Commercial assessment

• What are the existing solutions?• Who buys the products?• Who buys the tech (commercial rights)?

• If rejected UBC will assign to inventors

So You Have a New Invention ?

• Inventorship• Conception – YES!

• makes an original and substantive contribution to conceiving the invention

• vs reduction to practice – NO!• Suggested or thought about an idea or end result or posed the question to be

solved, but did not also come up with the actual way of implementing the idea, achieving the end result or solving the problem;

• Contributed an obvious, rather than an original and substantive, element of the invention;

• Was involved in testing or reducing someone else's idea into practice;• Suggested an extraneous idea or a variation that was not incorporated into

nor contributed directly to the actual invention;• Followed instructions of those who conceived the end result or solution;• Is the department head, supervisor or head of the laboratory where the

invention was developed, but did not contribute directly and substantially to the inventive process; or

• Provided funding for the research, equipment or laboratory where the invention was created.

Inventorship

• Patent Law• Co-inventors are treated as equal

• Real World• Levels of contribution are unequal among inventors

At UBC:• Inventors must decide among themselves on relative

levels of contribution• A Revenue Sharing Agreement among inventors at UBC is

eventually signed, formalizing the revenue splitting formula

• Can change as new Improvements come along• Need to determine relative values of tech in the product

being sold.

Intellectual Property at UBC

Policy 88 – Patents and Licensing (http://www.universitycounsel.ubc.ca/files/2010/08/policy88.pdf)

• UBC owns IP created at UBC in most cases• IP created by a student in the course of their studies in not owned by UBC• UBC owns IP created by UBC employees paid to generate IP (computer code)

with no further remuneration

• UBC takes charge of commercializing the technology•Includes paying the bills (patents, legal)

• Inventors get 50% of all remuneration from licensing

• IP includes:•Patents•Copyright

What is a Patent?

A patent is a contract with a governmental authority in which the applicant discloses his invention in sufficient detail to teach others how to practice it in return for a grant to the applicant of the right to exclude others from practicing the invention for a limited period of time.

Patents

Usefulness - inventions that do not work, defy the laws of physics, or drugs that turn out to be toxic are not patentable. Novelty - relative to prior art . If previously disclosed and “available to the public” the invention is not patentable .One year grace period after disclosure in Canada and US.

Non-obviousness - must not be obvious to someone skilled in the art; must be an inventive step.

Patent pathway

1. US Provisional patent application ($)– expires 12 months from original filing date

2. PCT - International patent application ($$) – expires 30 months from original filing date

3. National or Regional patent applications ($$$$) – expires 20 years from original filing date

Licensing

Option Agreement

• Options tie up the commercial rights for a period of time (Term)• Allows for time to kick the tires• Option Fee - $5-20k• Optionee pays the patent bills• Can exercise option at any time to enter good faith negotiations

for a license (6 month limit on negotiations)• Or the Option expires and we move on

Licensing

Term Sheet – non-binding – 90 day term

• Arrive at business terms• Upfront payment• Equity - ~10% - no dilution until $XX• Royalty• Milestones – regulatory (life science); financial; other?• Annual License Fee – $5-80k, ramping

• Performance requirements• Some light legal technical language

• Indemnity

How is new IP handled - Improvements

Typically Improvements are included

• Ownership• UBC can own all Improvements• Or UBC can own UBC and Joint Improvements, licensee

owns Licensee Improvements• How are Improvements defined?

• Broadly – “…relating to Technology…”• Less broadly – “…infringes Technology or Patents…”• Cuts both ways….

UBC Spin-off Companies

Special Considerations

• Waiver if rights to remuneration under UBC IP Policy• UBC on BoD – usually just and Observer• Newco is usually virtual, driven by CRAs with UBC, so COI issues• Sign license before raising money? Condition precedent terms

• Wide Distribution and Access

• Aggregating for Value

• Global Access Strategy

• Increasing Value through partnerships with CECRs (Centres of Excellence for Commercialization and Research)

• Promoting Entrepreneurship

Supplementing Traditional Practices

CECR Partnerships

• Collaborative research projects, commercial assessments, proof-of-concept studies, licensing of UBC technologies

• More than 40 technologies• Centre for Drug Research and Development (CDRD)

• Centre of Excellence for the Prevention of Organ Failure (PROOF)

• The Prostate Centre’s Translational Research Initiative for Accelerated Discovery and Development (PCTRIADD)

• Advanced Applied Physics Solutions (AAPS)

• Pan-Provincial Vaccine Enterprise (PREVENT)

• GreenCentre Canada (GCC)

• Centre for Probe Development and Commercialization (CPDC)

• MaRS Innovation (MI)

Centre for Drug Research and DevelopmentCDRD’s Flexible Model = Powerful Commercialization Engine

Public-Private, not-for-profit organization

Works with network of affiliated and partner institutions

Expert staff, integrated teams, and infrastructure

Access to non-dilutive capital Supports novel discoveries /

academic projects No claims on original IP

Commercial Arm structured as company with profits returned to CDRD

Opportunity to license-in and license-out technologies to / from industry

Has first rights to negotiate technology rights arising from CDRD projects

Maintains control over management of IP

Academic Discovery

Commercialized

Drug Candidate

Offers pharmaceutical and biotech companies, as well as external researchers, integrated translational research services:

• drug discovery

• preclinical testing

• tumour biology

• clinical expertise

Enables PC-TRIADD to negotiate more contract research agreements

Also supports and leverages value-added development of internal discoveries

Centre of Excellence for the Prevention of Organ Failure (PROOF Centre)

The PROOF Centre biomarker workflow

Global Access Principles

Guide the development, patenting and licensing of UBC technologies:

• Promote public/private partnerships to support research of technologies to benefit the developing world.

• Supporting environmentally friendly research and green alternatives.

• Respecting biodiversity and ensuring value return to countries of origin.

• Endeavoring to ensure that the developing world have ‘at cost’ access to our research innovations.

Industry Engagement

• Building 1,000 industry collaborations each year

• Valuing on-going partnership over individual transactions

• Increasing simplicity, clarity and flexibility

• Enabling innovative modes of interacting

• Coordinating simpler access to partnership opportunities

• Increasing involvement with local industry associations

Industry Engagement

• Support multiple modes of interaction with industry Student projects Co-ops and internships Faculty consulting Collaborative Research

• Support UBC as a Living Lab

• Targeted relationships with B.C.’s high tech sectors Life Sciences ICT Clean Tech Wireless Digital

Bioenergy Research and Demonstration Project

UBC Bioenergy Demonstration

Building: Four story CLT building

Gross Power: 1.95 MWe for export

Net Thermal: 8000 lbs/hr for district heating

CO2 Red: 5,000 tpy of GHG reduction

Footprint: 140’ X 100’

Core Sunlighting System

• Illuminates core of multi-storey building with sunlight

• Reduces the need for electric lighting and greenhouse gas emissions

• Improves work environment

• Demonstration installation on South Wall of Biological Sciences Building UBC

Knowledge Mobilization

• Traditional activities part of an expanded toolbox

• Non-proprietary distribution

• Translation into new practices, policies and guidelines

• Simplified click-wrap licensing options

• Aggregating and pooling complementary discoveries

• New delivery systems

• New partnerships and initiatives

• Implementing and extending UBC’s Global Access Principles

Knowledge Mobilization Channels

New Mobilization Channels

UBC and Intellectual Ventures Canada partnership

• UBC researchers invited to submit to IVC new ideas that will address current and future technology needs

• Accepted ideas will be proactively commercialized by IVC

• Research funding may be made available for technology development by IVC

Entrepreneurship

• Extending resources and guidance to all UBC entrepreneurs

• Continued support for UBC spin-off companies

• Founding partner in entrepreneurship@UBC

• UILO Start-up Services Voucher

• Launched genomics.entrepreneurship@UBC

entrepreneurship@UBC

• Campus-wide initiative

• Foster and support a culture of entrepreneurship

• Accelerate new venture creation and growth

• Engage alumni and the business community

• Provide enriched educational experiences

Dean Muzyka on entrepreneurship@UBC

Recon Instruments

Goals

• Accelerate the # of knowledge based companies created via UBC student (current and recent) graduates

• Discover more commercialization opportunities by greater exposure of UBC student based innovation to entrepreneurial industry leaders

• Bridge the gap between UBC innovation and venture capital by providing venture “start-up capital” and company formation skills to create “venture fund ready” companies.

Activities

• Over 140 new UBC ventures have interacted with entrepreneurship@UBC (even split between ventures being led by recent alumni and by current students)

• First Seed Accelerator Competition held in October 2011

• Educational series launched

• Dedicated space opened in September 2011, housing 8 companies

• Over 30 ventures accepted into start-up services voucher program

Aeos Biomedical

UILO Start-up Services Voucher

• Launched in January 2011

• 114 new ventures from the UBC community applied

• 42 new ventures in three intakes from UBC students, staff, faculty and recent alumni

• $5,000 worth of startup services (40 hours) from the UILO in areas such as

• IP Strategy, Business Planning, Incorporation, Corporate Structure, Governance and more

• Partner vendors for legal services, web design, communications and more

UILO Voucher Program

Three Pillars

• Introductions - Network and Mentorship

• experienced mentors are required

• Provision of UILO Services

• Business planning, IP services, grant writing, etc.

• Vendors

• Lawyers, accountants, brand identity experts, etc.

Voucher Program - Nuts and Bolts

• Eligibility – Faculty, staff, students (even part-time), and alum who have graduated within the last 3 years

• Venture need not be incorporated, technology based, Canadian based, or for-profit.

• Applicants can apply anytime.

• Applications are pre-screened by the UILO• Applicants come to present the venture• UILO assesses and decides whether to take it on

• For successful applicants

• UILO puts a mentor in place• UILO puts a Start-up Services Agreement in place(mainly

to protect liability of UBC)• Voucher expires after 40 hours of service is provided or 12

months• UBC wants nothing in return except updates from the company

from time to time

Some Voucher Program Paticipants

UILO Voucher

entrepreneurship@UBC Seed Accelerator Fund In partnership with BCIC

• Venture fund owned and operated by UBC for the purpose of investing in the next generation of student entrepreneurs

• Capitalized with donations from alumni with matching contributions from BC Innovation Council 

• Seeks out very early stage business opportunities founded by UBC students faculty, staff or alumni who have graduated within the last three years

• Investments may range in size from $25K to $100K

• Raised $1M with a goal of raising $10M

UBC FY 2009 Indexed Against Canadian G13* (ranking out of 12)

AUTM Benchmarking

G13 Average

(100)

3rd

1st

3rd

3rd

1st

2nd=

1st

2nd

4th

200 300

2nd

1st

1st

Total Research Expenditure

Invention Disclosures

New Patent Applications

Licenses Executed

Licensing Revenue

New Startup Companies

Legal Fee Reimbursement Ratio

Industry Funded Research

Federal Gov't Funded Research

Invention Disclosures/$1m

Licensing Revenue/$1m

New Startup Companies/$1m

3rd

1st

3rd

2nd

2nd

1st=

1st

4th

2nd

2nd

2nd

4th

UBC FY 2009 Indexed Against U.S. Benchmarking 10

California Institute of Technology

Cornell Research Foundation Inc.

Harvard University

Johns Hopkins University

Massachusetts Institute of Technology (MIT)

Penn State University

Stanford University

University of California System

University of Washington/Wash. Research Foundation

University of Wisconsin at Madison/ W.A.R.F.

AUTM Benchmarking

U.S. 10 Average

(100)

200

Lowest

9th

7th

Lowest

7th

8th

4th

6th

5th

3rd

3rd

1st

6th

2nd

Lowest

Total Research Expenditure

Federal Gov't Funded Research

Industry Funded Research

Invention Disclosures

New Patent Applications

Licenses Executed

Licensing Revenue

New Startup Companies

Legal Fee Reimbursement Ratio

Industry as Proportion of Total Research Expenditure

Invention Disclosures/$1m

New Patent Applications/$1m

Licenses Executed/$1m

Licensing Revenue/$1m

New Startup Companies/$1m

lowest

lowest

7th

9th

lowest

7th

10th

8th

1st

2nd

5th

8th

2nd

8th

2nd

UBC FY 2009 Indexed Against U.S. Benchmarking 10AUTM Benchmarking

Contact

University-Industry Liaison OfficeThe University of British Columbia #103 – 6190 Agronomy RoadVancouver, BC V6T 1Z3

Tel: 604-822-6016Fax: 604-822-8589Web: www.uilo.ubc.ca

Development Steps

• Further development via gov’t funding UBC?• UILO PDP funding $5-10k• POP grants (life science) $160k• I2I grants (dead sciences)• Charitable foundation money• Get a hold of royalties from a previous invention???